Harriet Evans May 7 2019 High Court seeks to clarify whether speculative investment by a private individual is a business or consumer activity RPC | Litigation - United Kingdom Harriet Evans Litigation FactsRecast EU Brussels RegulationDecisionCommentThe High Court has dismissed a jurisdiction challenge against a private individual making speculative currency transactions on the basis that she could be considered a consumer under the recast EU Brussels Regulation (1215/2012).(1)Facts The defendant, Reliantco, was a Cypriot company offering financial products and services through its online trading platform, UFX. The claimant, Ms Ang, was a person of substantial wealth who invested in bitcoin futures on a leveraged basis through the UFX platform.Ang was not, at the relevant time, employed or earning in any self-employed trade or profession (save that there was an issue between the parties as to whether her activity as a customer of Reliantco via the UFX platform was to be classified as such). Further, she had no education or training in cryptocurrency investment or trading. However, Ang's husband, Mr Wright, had amassed a large cache of bitcoin through his early investment in bitcoin mining and identifies himself publicly as the inventor/co-inventor of bitcoin. (The judge was not required to consider whether this claim was true.)Ang opened her account with Reliantco in January 2017 in order to invest approximately $200,000 from her personal funds, being the proceeds of the sale of a former home and her interest in an Australian next generation banking business. At the time of opening the account, Ang was required to click a button to indicate that she accepted Reliantco's terms and conditions, which included an exclusive jurisdiction clause in favour of the Cyprus courts.The underlying claim arose from the alleged blocking of access to Ang's account by Reliantco in August 2017 and its subsequent refusal to allow her to withdraw funds from the UFX platform. Ang alleged that Reliantco should compensate her for the loss of her open bitcoin positions, which she claimed in August 2017 equated to approximately $1.1 million and, at the time of commencing the legal proceedings, would have been in excess of $3 million.Ang issued proceedings in England, her country of domicile. Reliantco challenged the jurisdiction of the English court on the basis of the exclusive jurisdiction clause and Article 25 of the recast EU Brussels Regulation. Ang claimed that the exclusive jurisdiction clause was ineffective and did not require her to bring the claim in Cyprus because:she was a 'consumer' within the meaning of Section 4 (Articles 17 to 19) of the recast EU Brussels Regulation; orthe jurisdiction clause was not incorporated into her contract with Reliantco in such a way as to satisfy the requirements of Article 25.Ang claimed that she had received hyperlinks to Reliantco's terms and conditions (which included the exclusive jurisdiction clause), but that they did not work, such that they took her to an error page.Ang also claimed under the Data Protection Act 1998 and the EU General Data Protection Regulation (GDPR), seeking an order for the rectification, destruction, erasure or blocking of her personal data held by Reliantco.Recast EU Brussels Regulation The recast EU Brussels Regulation on the jurisdiction and enforcement of judgments in civil and commercial matters applies to all proceedings commenced in EU or European Free Trade Association (EFTA) countries on or after 10 January 2015.Under Article 25 of the regulation, where the parties have agreed that a court of an EU/EFTA member state shall have jurisdiction in relation to any disputes that occur between the parties, that court shall have jurisdiction.Articles 17 to 19 of the regulation relate to jurisdiction over consumer contracts. A 'consumer contract' is expressed as a contract concluded by a person (the consumer) for a purpose which can be regarded as being outside their trade or profession. Three types of contract are covered, as set out in Article 17(1)(a) to (c)).Article 18(1) provides that "a consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled, or regardless of the domicile of the other party, in the courts for the place where the consumer is domiciled".The jurisdiction provisions are designed to protect the consumer, who is viewed in these situations as the weaker party. A jurisdiction clause that is inconsistent with these provisions is generally rendered ineffective.DecisionJurisdictionThe judge rejected Reliantco's jurisdiction challenge. In considering the purpose of the investments, the judge held that the contract fell within Article 17 of the recast EU Brussels Regulation. The purpose of the investments was not a business activity, but a private consumption need. The fact that Ang was wealthy and had some knowledge of the investment did not preclude her from being a consumer. She was therefore entitled to commence proceedings in her country of domicile, despite the exclusive jurisdiction clause.The case law on the definition of a consumer is extensive and in determining whether Ms Ang was a consumer, the judge cited Shearson,(2) Benincasa Srl(3) and Apostolakis.(4) The judge spent time analysing the decision in Apostolakis, a case where the defendants were wealthy private individuals who had entered into forward foreign exchange transactions with the claimant bank. The contracts were entered into outside their professions and it was therefore held that the defendants were consumers. However, when the same litigation came before the Greek courts,(5) it was held that the individuals were not consumers.The judge in that case suggested that the Greek court in Apostolakis had erred in introducing the concept of a 'quasi-professional', where someone could not be a consumer due to their knowledge and experience of skill in the investment sector (although there is clearly a line to be drawn here). The main disagreement between the English and Greek decisions was whether investing for private wealth, in the form of trade on the international currency exchange market, was by its nature a business activity. At the time of opening her account, Ang in no way represented that she was opening the account for business purposes. The judge in this case therefore agreed with the decision in the English Apostolakis case, namely that wealth and having some knowledge does not preclude an individual from being a consumer.The judge noted, with particular reference to Apostolakis, that there was conflicting case law in this area. Further, he explained that there was currently no European Court of Justice (ECJ) judgment on whether contracts entered into by wealthy private individuals for the purpose of investing their wealth are consumer contracts within Section 4 of the recast EU Brussels Regulation. The ECJ heard a reference from the Czech Republic(6) earlier this year in relation to whether Article 17(1) of the recast EU Brussels Regulation applies to an individual who engages in trade on the international currency exchange market through a third party professionally engaged in that trade. Judgment is awaited.Effective jurisdiction clauseThe judge (obiter) considered that had the jurisdiction challenge been well founded, the exclusive jurisdiction clause would have been effective under Article 25 of the recast EU Brussels Regulation. There was evidence that:the terms and conditions were available during the relevant period; andAng had been referred to them on occasion and had had the opportunity to request them.Data protection claimsIn obiter, the judge also considered that since the jurisdiction challenge had failed, so did the challenge by Reliantco to the jurisdiction of the data protection claims under the Data Protection Act 1998. These claims fell within the scope of the recast EU Brussels Regulation as they were civil/commercial matters not excluded by Article 1(2) and arose out of Ang's contract with Reliantco, meaning that they fell within the wider decision on jurisdiction explained above. However, the judge concluded (again, obiter) that had Reliantco's challenge to jurisdiction been well founded (ie, had it established jurisdiction in Cyprus), the English court would have had jurisdiction to consider the claim under the GDPR for an order for rectification, destruction, erasure or blocking of her personal data pursuant to Articles 16 and 17 of the GDPR. Under Article 79 of the GDPR, Ang would be entitled to bring proceedings in England against Reliantco as data controller or processor because she is habitually resident in that country (notwithstanding Article 25 due to Article 67 of the recast EU Brussels Regulation).CommentThis judgment demonstrates that the question of whether a private investor is a consumer for the purposes of the recast EU Brussels Regulation remains unclear and will often turn on the facts. With a lack of clarity in the case law, it also demonstrates the need for the issue to be considered at a higher level.This judgment also provides some interesting obiter commentary on the jurisdiction over data protection claims.For further information on this topic please contact Harriet Evans at RPC by telephone (+44 20 3060 6000) or email ([email protected]). The RPC website can be accessed at www.rpc.co.uk.Endnotes(1) Romana Ang v Reliantco Investments Limited  EWHC 879 (Comm).(2) Shearson Lehman hutton Inc v TVB  (Case C-89/91) EU:C:1993:15.(3) Benincasa Srl v Dentalkit  (Case C-269/95) EU:C:1997:377.(4) Standard Bank London Ltd v Apostolakis  CLC 933.(5) Standard Bank London Ltd v Apostolakis  ILPr 29.(6) Petruchova v Fibo Group Holdings Ltd (Case C-208/18).